The NPS barometer
We have a client in the ski resort industry that answers the question, “How are we doing as an organization?” by studying movement within the Net Promoter Scores they constantly collect through research.
“We utilize NPS as a tool to measure how we are doing in our guest’s eyes,” said Brian Fairbank, Chairman of the Fairbank Group, which includes enterprises such as Jiminy Peak, Cranmore Mountain Resort, and Bromley ski areas. “The guest experience is the most critical aspect of our business and NPS shows us the areas we need to focus on to improve that experience.”
The NPS number isn’t the only KPI they’re looking at, but it’s viewed as the report card for the entire organization and when it moves north, there is great happiness.
For the record, the NPS asks the question: “How likely are you to recommend [Name of Brand] to a friend?” It originated around 2003 in a Harvard Business Review article called “The One Number You Need to Grow.”
It has been embraced notably by Bain & Co as well as a fudgezillion other companies. In fact, NPS been around nearly 11 years – and there’s really nothing else to replace it. So here’s our take on the net worth of net promoter scores.
Why the NPS is good
It’s real simple. It’s really just 3 numbers. You – and everyone in the company – can get your head around it.It’s conversational. Because of the impact of social media, brands today live (and die) in conversation to a greater extent than ever. So what better way to understand brand performance than to ask how a consumer would talk about it to a friend? The NPS detects the degree to which a human is personally invested in vouching for a brand.
You get clear lines of engagement. In classic NPS segmentation, customers respond on a 0-to-10 point rating scale and are categorized as follows:
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, driving growth.
- Passives (score 7-8) are satisfied but unenthusiastic. Beware: You can lose them to competition.
- Detractors (score 0-6) can hurt you through negative word-of-mouth.
NPS helps organize the brand apostles. Those 9s and 10s are the ones spreading the word. They can form the basis of a loyalty program, an advisory panel, or an informal sounding board for brand development.
It shows you where you’re vulnerable. There’s plenty of evidence to support the idea that most growth opportunities are actually retention opportunities. By dealing with unhappy campers effectively, you can win hearts and wallets. So consider that the 0-6 crowd is potentially as valuable as the 9s and 10s.
The limitations of NPS
It needs to be consistently implemented across lots of areas. To understand a total NPS rating, resorts need to dissect the consumer experience in a number of areas: Lift lines, concessions, rental equipment, dining, lodging, parking, and so forth. Only this way can you tell how individual strengths and weaknesses are impacting the whole experience. Adobe has a good blog on this.
It can be shallow – and it mandates more research. We believe the biggest single disadvantage of the NPS is often the lack of ability to identify and act upon driving factors behind customers’ responses to the question. So the real value of the NPS only happens when you drill down into it. Otherwise it’s a number on a board.
Combine your NPS score with other KPIs that are focused on other aspects of the brand experience such as:
- Search volume. Search activity around specific marketing programs will tell you if marketing is actually driving sales – and identify the front end of the consumer experience rather than the back end.
- Verbatims. There’s no substitute for listening to voices, in focus groups or on the phone or in person.
- Shadow shopping. One criticism of NPS is that the number doesn’t say anything about consumer behavior. Try observing consumers on the resort property as they arrive and leave. Their attitudes and energy will tell you a lot.
When it’s time to talk research, we’re never bored. So join us for a beverage sometime soon.